Washington DC Real Estate Market.
Recession Proof or Not? You Decide!
Macro View Vs. Micro View
Nationwide Picture: Going Down with Signs of Recovery.
Washington D.C. Picture: Holding Steady – Some Improvement.
It’s amazing but we are fortunate to be in Washington DC.
U.S. homes continued to fall Nationwide during the 2nd quarter of 2010 in the meantime Washington DC neighborhoods appear to ignore these news and statistics.
Prices in Washington DC continues to have a moderate increase compared to the previous year, the Median Sold Price is climbing and the days that a property seats on the marker (DOM) have decreased.
I personally dislike to hear that we are a “recession proof market”, it remind me of the typical barbecue conversation of the last real estate boom in which people were proud to talk about their real estate portfolio and how well they were doing in this recession proof area.
I think that we are just extremely fortunate to enjoy a healthy and strategically located market sounded by strong government employment opportunities that is highly insulated from massive layoffs and seasonal businesses.
Despite theses 3 detrimental factors:
- Recent end of the Tax Credit incentives.
- Negative nationwide market and economic trends.
- Strict lending guidelines.
The Washington DC market continues to have some elements working in our favor, such as:
- The fact that we fall into the FHA High Cost Area Limit of $729,750.00 for single unit residence. ($934,200 Two Units Residence, $1,129,250 Three Units Residence, and $1,403,400 Four Units Residence).
- The temporary increase of the FNME lending limits that allows the bigger buyer segment eligible for the vast majority of the inventory. (As of September 1st 2010 we have 2,100 active listings under $750,000 Vs. 480 active listings over $750,000).
- Another important element that contributes to our market is that we are at ground zero of our Federal Government, the strategic location kept us in a much better position of the discouraging nationwide unemployment factors.
- I could also mention that our DC Market continue to have limited inventory compared to other major cities due to the city density and constructions limitations of high-rise buildings and developments.
Numbers, Numbers and more Numbers:
To put our opinion in perspective lets cruch some numbers.
- Based on the MRIS data, if we compare our local market behavior for the month of July 2010 to the same month of 2009 we have significant improvement in many areas; The local Market statistics of July 2010 (07/01/2010 - 07/31/2010) provided by MRIS and excluding the FSBO’s, clearly show that our:
- Average Sold Price has increased 13.90% from $483,477 to $550,687.
- Average days that a property seats in the market (DOM) have decreased an impressive 29.55% from 88 to 62 days in the market.
- Median Sold Price has increased 11.40% from $386,000 to $430,000.
- 2,580 Active Listings as of August 310 in our DC MRIS data compared to the 3,140 Active Listings of July 2010 (7/31/2010) revealing a sharp reduction of inventory and a potential market improvement for August 2010.
Buyers and what kind of financing are they using?
Another important factor that could guide us in our decision is the Conventional Versus FHA ratio:
Out of the 529 units sold during this period in the District of Columbia:
274 units were sold using a Conventional Financing.
- 111 FHA Financing.
- 15 VA Financing.
- 9 Assumptions.
- 105 Cash transactions.
- 15 Undisclosed Sales.
Days on the Market: Are DC properties sitting on the market too much?
Out of the 529 sales:
- 275 were sold within the first 30 days.
- 95 sales between days 31-60.
- 60 sales between days 61-90.
- 35 sales between days 91-120.
- 65 units lasted more than 120 days or more.
So, what can we conclude?
Do not foolish yourself with these positive figures, the numbers above indicate only one month of statistics versus the same month of the previous year. The real deal will be comparing the entire period 2010 against 2009.
That comparison will show us how much the tax incentives helped this housing market and how much of this recovery was the result of the current historically low rates.
My personal opinion is that we should be thankful for the market we enjoy; it is definitely one of the best and healthiest markets in the nation.
We enjoy a pleasant, friendly and honest real estate market because Realtors, Buyers, Sellers and the Regulating Agencies of the Washington Metropolitan Area are responsibly reacting to the challenges that the economy presented us.
To get additional information about market trends and statistics send us an email at firstname.lastname@example.org or visit our Website at www.districtoneproperties.com.
Andre Perez | Real Estate Agent | District One Properties LLC | 220 S Payne St Alexandria VA 22314 | Cell: 703 926 7603 | Office: 703 671 1000 | Fax 202 403 0512 | A email@example.com